Osmadi_REITs_New_Property_Dimension_Islamic_Finance - 13th...

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13th Pacific-Rim Real Estate Society Conference Fremantle, Western Australia, 21 to 24 January 2007 REITs: A NEW PROPERTY DIMENSION TO ISLAMIC FINANCE Atasya Binti Osmadi University of Western Sydney Contact author for all inquiries and contact detail: [email protected] Acknowledgement: I would like to thank you the University of Western Sydney for funding support and highest gratitude to my supervisor, Professor Graeme Newell for providing me with guidance and insight over the year I spent on my research. Abstract: Published evidence on the performance of PTFs (Property Trust Funds) in Malaysia is very limited (e.g., Kok and Khoo, 1995; Ting, 1999; Newell, Ting and Acheampong, 2002; Rozali and Hamzah; 2006). With significant results from previous research, various efforts has been taken to improve the performance of the Malaysian REIT market including continuous regulation reforms, high quality real estate acquisitions and the development of competitive investment products (i.e. Islamic REIT). However, a review and performance analysis of Malaysian REITs has not yet been discussed. This paper aims to discuss whether these efforts have resulted to in increased stature and performance of the Malaysian REIT industry.
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13 th Pacific-Rim Real Estate Society Conference Osmadi 1 INTRODUCTION Recent years have seen an increase of interest in REITs at a global level; particularly amongst global property securities fund. Globally, REITs are developing rapidly with the number of REITs growing significantly. It has a current market capitalisation of more than US$600 billion (see Figure 1). Figure 1: Growth of Global REITs (as of December 31, 2005) Source: UBS Investors Index. Of this, the Asian property market has the strongest growth prospects compared to other regional property markets, following wider market acceptance and increasing attention from institutional investors. Since 2001, more than 70 REITs have been listed in Japan, Singapore, Hong Kong, South Korea, Malaysia, Taiwan and Thailand. The total market capitalisation of the REIT sector in Asia is approximately US$47 billion, with more REITs concurrently being created. Regulatory reform has been made particularly by Singapore and Hong Kong regulators to enhance their REIT competitiveness in Asia. For a comparison with other Asian countries, Figure 2 shows the listed REITs in Asia. Figure 2: Asian Listed REITs/Property Funds as at end April 2006 Market Stock Market indices Stock index change from Oct 2005 No. of listed REITs Dividend Yield 10-yr govt bond yield REIT Market Cap (US$ Million) Japan 16,906.23 24.25% 32 4.1% (avg) 1.85% 30,060 Singapore 2,610.71 17.77% 10 5.0% (avg) 3.46% 8,680 Hong Kong 16,661.30 15.81% 3 3.6%-6.3% 4.80% 5,480 S. Korea 1,419.73 22.59% 7 8.7% (avg) 5.30% 700 Taiwan 7,171.77 24.42% 4 3.7%-4.6% 2.06% 1,280 Thailand 768.29 12.55% 8 7.1% (avg) 5.51% 560 Malaysia 949.23 4.22% 7 6.6% (avg) 4.30% 590 Source: CB Richard Ellis, company announcements/ prospectus.
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This note was uploaded on 10/09/2011 for the course 323 3232 taught by Professor 3232 during the Spring '11 term at Apex College.

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Osmadi_REITs_New_Property_Dimension_Islamic_Finance - 13th...

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